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5. Average annual recommended tax cuts or increases as

a perc8entage of the prior year's expenditures through

2

FY99.

Tax Rate Variables

1. Percentage point change in the top personal income

tax rate under each governor, including governors' recom-

mended changes that were not enacted.

2. Percentage point change in the top corporate income

tax rate under each governor, including governors' recom-

mended changes that were not enacted.

3. Sum of the top marginal state personal and corporate

income tax rates in 1998.  (This variable is given a weight

of only one-half.)

4. Change in the state sales tax rate under each gover-

nor, including governors' recommended changes that were not

enacted.

5. Change in the state gasoline tax rate under each

governor, including governors' recommended changes that were

not enacted.  (This variable is given a weight of only one-

half.)

The Most Frugal and the Biggest Spending Governors

A summary of the results and ratings on the four expen-

diture variables is shown in Table A-1.  Tables A-2 through

A-5 list the five biggest spenders and five biggest budget

cutters in each individual spending category.

The two governors with the best records of budget re-

straint were Bush of Texas and Rowland of Connecticut.  Each

of those governors recommended and enacted spending levels

that declined by 1.5 percent per year on a real per capita

basis and declined by more than 2 percent per year on a per

$1,000 of personal income basis.  Janklow (South Dakota),

Pataki (New York), Batt (Idaho), James (Alabama), and Engler

(Michigan) also have exceptional records of spending re-

straint.

By far the biggest spender of the group was Kitzhaber

of Oregon.  On average, his recommended budgets have called

for increasing real per capita spending by more than 5 per-

cent, and spending has gone up roughly 2 percent per year

faster than personal income.  Carper (Delaware), Chiles